A new, fairer economy is possible, but that would mean sacrifice
- Imraan Valodia
That Covid-19, the lockdown and whatever will come after will have had a lasting and devastating impact on our economy seems indisputable.
Since it was first reported in Wuhan, China in December 2019, the SARS-CoV-2 virus and the resultant disease, Covid-19, has evolved from being a distant perceived threat to having the most devastating impact on the world economy of any single event since the Great Depression.
This has occurred in a matter of less than 6 months. Having declared a state of national disaster on 15 March 2020, President Ramaphosa announced on 23 March that South Africa would commence a three-week national lockdown starting at midnight on 26 March 2020.
The lockdown was then extended for a period of 2 weeks, and continues for the foreseeable future, albeit now in terms of the South African government’s risk-assessed phased approach.
The economic, health, social and political consequences of the pandemic have wreaked havoc on our lives and left us all permanently scarred.
The pandemic has exposed the deeply unequal world that we live in, and uncovered how vulnerable the economic situations of millions of our citizens really are.
It is ironic that it is not the working of the economy, but rather the shutting down of the economy, that has most starkly exposed our unequal world.
Those at the top own the most of everything
Two pieces of research on income and wealth, conducted by my colleagues Gabriel Espi and Aroop Chatterjee in the Southern Centre for Inequality Studies, highlight the extent of South Africa’s inequality.
If we divide South African households into five groups (quintiles), we can create a picture of income inequality and how different income groups have been able to live through the challenges of a lockdown.